“You cannot spend your way out of recession or borrow your way out of debt,” European Parliament member Daniel Hannan said.
While that is painfully obvious to Europeans, who have gone down that road and now confront a devastating fiscal crisis, it is apparently news to President Obama and his spendthrift allies in Congress who seem determined to follow Europe’s lead.
Despite opposition from me and other outnumbered fiscal conservatives, the Democratic-controlled Senate voted recently to allow the President to raise the debt ceiling from $15.2 trillion to $16.4 trillion. That increase alone amounts to nearly $4,000 of additional debt for every American, and the total debt limit adds up to $50,000 per person.
Our nation’s debt is now greater than the size of our entire economy. Moreover, the debt-ceiling increase amounts to nearly 8 percent of our entire gross domestic product (GDP), while the total debt limit totals 108 percent of GDP, which places the U.S. in the same bad fiscal neighborhood where faltering European nations now reside.
Such figures add up to big trouble for our country. Federal spending is out of control; yet instead of rein in runaway spending, the grow-government-at-all-costs crowd in the White House wants to double-down on the same failed government initiatives that got us into this mess.
“Rates are cheap, so let’s continue borrowing and riding this debt bubble as far as we can,” the White House and their liberal allies tell us.
Well, we know how this story ends. The problem with bubbles is that they always burst. We know this because of the housing bubble and European sovereign debt bubble, both of which burst with bitter results. Our nation faces the same consequence unless we act quickly to cut government spending and pay down the national debt.
That is why I could not, in good conscience, support the President’s call to increase the debt limit. We can ill afford to encourage more bubbles with fool’s gold with the misguided notion that because rates are now cheap we should borrow even more.
We are on the edge of the cliff and we need to step back from the brink. Sure, rates may be low today, but they can change in an instant and our bloated federal government will be exposed as one we cannot afford. When that day comes, our creditors will pounce here as quickly as they did in Europe. We already got a small taste of what will come this past summer, when Standard and Poor downgraded the federal government’s top AAA rating for borrowing for the first time in history.
It is time to reverse course – to resist the siren song of cheap credit and to focus instead on policies that will shrink the size of the federal government, get rid of the trillion-dollar-plus deficits the Obama presidency has rung up for three consecutive years, and empower the private sector to create jobs. It is also time for the White House to abandon its borrow more, spend more and tax more mentality.
A failure to lead usually leads to failure. Unfortunately, that has been this President’s modus operandi for three years. He has failed to produce a single coherent budget plan, failed to work with Congress to reform entitlement spending and failed to reduce the red tape and regulatory overreach that is crushing job creation in Utah and across the nation. About the only thing he never fails to do is to keep on spending.
That is no way to run a country.
Like the vast majority of Utahns, I am disgusted with this White House’s borrow-and-spend economic policies and am unalterably opposed to giving the Administration even more money to spend on the nation’s overdrawn credit card. Utahns are cutting back and doing more with less. I am committed to continue doing everything I can to ensure that our President does the same.
-- Sen. Orrin Hatch, R-Utah